Economic Reports Scorecard The economic data of the last fortnight was typical for this cycle with some reports showing improvement and others the opposite; "mixed" has been the most often used adjective of this expansion. Of course, some reports are more important than others and the bad news was concentrated in an area that has consistently supported the economic bull [...]
Economic Reports Scorecard The US economy continues to trend, as the Fed finally noticed in its most recent dot plot, at a low rate of growth. The Fed downgraded their long term growth outlook to 1.8% and that's just a rounding error from the 2% we've been tracking for quite a while now. The fluctuations around that number have basically [...]
I've put off this update as long as I can now, waiting for some clarity, a change in our indicators that might suggest a change to the portfolio. Alas, despite a Fed meeting, a BOJ meeting and a plethora of economic data nothing has moved sufficiently to warrant a change. The risk budget is unchanged this month as is the [...]
“Should I stay or should I go now? If I go there will be trouble. An' if I stay it will be double…this indecision's buggin' me” The Clash (Lyrics) Summer vacations are over, all are back to work and volatility has returned to the markets. As we wait for another decision from Janet Yellen, (will she stay or will she [...]
Economic Reports Scorecard That improving economy the Fed has been touting? Well, as Emily Litella once said on Saturday Night Live, never mind. The surging economy of the Fed's feverish imagination melted away over the last two weeks amid a deluge of weak and weaker than expected data. The data was never that strong to begin with but as I [...]
Economic Reports Scorecard The topic of the Fed's annual Jackson Hole retreat this year was "Designing resilient monetary policy frameworks for the future". That the gathered group of eminent economists had failed so spectacularly at designing a resilient monetary policy framework in the past did not deter the assembled learned group from pontificating about their presumed future accomplishments. Not that [...]
I haven't posted on sector momentum since just after the Brexit vote because there hasn't been much change. The most obvious change is that all sectors are now positive on a three month basis. Defensive sectors have retreated a bit and more cyclical sectors have advance a bit. The result is a market that is only slightly improved since the [...]
Economic Reports Scorecard If you want to understand the US economy based on one economic report, you could do a lot worse than the report on productivity released last week. This was the third quarter in a row that showed a decline in US productivity. That is, output was up (GDP was positive) but not as much as the amount [...]
The risk budget is unchanged this month although the composition of the portfolio does change. For the moderate risk investor, the allocation between bonds, risk assets and cash remains at 50/45/5. There are changes to the allocation but the overall risk budget stays the same. Credit spreads did continue to narrow this month but other indicators did not confirm the [...]
“Remind people that profit is the difference between revenue and expense. This makes you look smart.” Scott Adams (Cartoonist) Surprise, surprise, the second quarter earnings season is again producing better than expected overall results. Analysts’ earnings growth estimates for the S&P 500 are now somewhere around -3.5%, an improvement from the previous - 5.5% - the earnings contraction is [...]
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